Among the discussions about policy, strategy, tactics, and lessons learned (especially from Chicago), the most fascinating—and perhaps significant—conversation was about the school-reform agenda itself. What’s currently consuming the education-reform movement? What’s next up on the to-do list? And what potentially game-changing item is on the horizon? Allow me to report.

The first point (and perhaps an obvious one) is that reformers nationwide are deep in implementation mode. Thanks to huge state-level policy victories on common standards, teacher evaluations, school choice, and more (some of it inspired by the federal Race to the Top program), much focus has shifted to getting stuff done at the local level. That’s led some to call for a breather when it comes to new legislative activity. Like a snake that’s just swallowed a deer, most reformers (and the education system itself) simply can’t take anything else on right now.

But that’s not the case everywhere. In some states, the 2013 legislative session is likely to feature big fights around:

Teacher preparation

Principal licensure

Pension reform

Digital learning

Let’s take each in turn.

Teacher Preparation

This focus is a natural outgrowth of reformers’ obsession with teacher evaluations and with the demands of Common Core implementation. It’s also inspired by the National Council on Teacher Quality’s national review of education schools, due for release next spring. Simply put, now that serious efforts are underway to gauge teacher effectiveness and upgrade instructional skills to prepare for higher standards, doesn’t it make sense to improve teacher quality at the source? In a rational world, this battle would have been joined years ago. But the ed schools are famously resistant to change; NCTQ and many state organizations are hopeful that this time might be different. Reformers want states to raise standards for entry into teacher-prep programs; forcing them to educate in research-based methods for teaching reading; align their curriculum with the Common Core; develop data systems that can link student-achievement results to teachers’ preparation programs; and shut down the many mediocre (or worse) ed schools in operation today.

Principal Licensure

One clever session at the PIE Network conference asked, “Are principals the new teachers?” Expect reformers to do to school leaders what they’ve done to teachers: Develop more rigorous evaluation systems; open up alternate routes into the profession; offer differential pay for tough assignments or exceptional performance; etc.

Pension Reform

States have alreadybeenbusy on this front, but mostly with an eye toward closing big holes in their pension obligations, not in fundamentally reforming the system. In many cases, these changes have made problems worse from a teachers' labor-market perspective. In changing the system, state leaders have lowered new teachers’ take-home pay by mandating exorbitant contribution rates; they’ve refused to offer 401(k) style options because they need new teachers’ dollars to finance current obligations to retirees (see Webster’s definition of a Ponzi Scheme); and they’ve made teaching less attractive by reducing benefits in the long term. In other words, they’ve held today’s retirees (and older teachers) harmless while putting the burden of “reform” on new teachers and those still in ed school. (The Baby Boomers strike again.) Reformers will work for more fundamental, sustainable fixes.

Digital Learning

With the support of Digital Learning Now! and former governors Jeb Bush and Bob Wise, advocates in many states will be pushing to eliminate “seat time” requirements; create or expand online charter schools; and tweak teacher-evaluation systems to deal with the rise of hybrid learning environments (which often move away from the one “teacher of record” model).

Those issues aren’t exactly small potatoes; each could stake a claim to having “transformative” potential: Upgrading our teacher and leader pipelines could make American schools more like the best systems in the world; moving toward portable pension systems would make it vastly easier to terminate ineffective teachers (if hundreds of thousands of dollars of pension wealth is no longer at stake); digital learning is undoubtedly going to play a significant role in the schools of tomorrow.

But there’s an issue on the horizon that could potentially trump all of that, for it touches every piece of the education enterprise: school finance. While this item isn’t exactly “new,” a new approach could revolutionize our schools.

Arguably the last time a state upended its fundamental approach to school finance was Michigan in 1993, under the leadership of then-Governor John Engler. The legislature eliminated local property taxes as a source for school funding, voters approved an increase in the statewide sales tax, and the burden of education finance shifted significantly away from districts and to Lansing. This made education spending in Michigan much more equitable, and also set the stage for an explosion of public school choice—not just via charter schools but via the inter-district variety as well. Now 115,000 students in Michigan participate in public school choice through charter schools alone, facilitated by the state dollars that follow them to the venue of their choice.

Twenty years later, are we ready to take the next step? The Holy Grail, according to many reformers, is to shift school finance entirely to the state level. That may prove politically impossible (affluent districts are always going to want to retain the right to tax themselves at higher rates in order to exceed average spending). But one could imagine a savvy governor calling for significant property-tax relief at the local level, to be offset by new taxes at the state level. Then, funds would flow back to the schools (stress “schools”—not school districts) via student-based budgeting. In other words: in the kids’ “backpacks,” following them to the schools of their choice, with needy kids carrying more dollars than their peers.

Such changes would have a catalytic effect on the larger reform movement. Educational choice would thrive, with charter schools earning a fairer share of funding and course-level financing for digital learning becoming much more doable. (In states with school vouchers, private school choice would flourish too.) Equity would be promoted, with poor districts much more able to offer competitive salaries, extended learning time, and early interventions than they are today. School principals would be empowered to spend their dollars strategically, and to hire the best teachers they can afford. Districts would no longer be able to micromanage schools, as they wouldn’t control the purse strings. And the stranglehold of “local control” would be further diminished, as the state picks up the tab for an enterprise in which it increasingly calls the shots.

This brand of school-finance reform, some say, is political suicide. Perhaps. But if there’s a way to a “Grand Bargain” on education funding, the savvy advocacy groups of the PIE Network will find it. Stay tuned.